This post was originally published on this site
https://fortune.com/img-assets/wp-content/uploads/2024/04/GettyImages-1238578251-e1714506660714.jpg?w=2048
Arnaud Lagardère, the French business scion who heads a publishing group now controlled by Vivendi SE, was charged with alleged embezzlement and has resigned provisionally as chief executive officer of Lagardère SA.
The charges against the 63-year-old executive also include vote buying, abuse of power and breach of trust, disseminating false or misleading information and failure to publish accounts, according to a person familiar with the matter. He has been placed under judicial supervision, banned from holding executive roles and needs to post a bond of €200,000 ($214,000), said the person, who asked not to be named discussing a legal case.
Lagardère, who is chairman and CEO of Lagardère SA, informed the board that he was forced to resign as CEO following the indictment and provisional ban from management activities issued against him on April 29, the listed company said in a statement. Jean-Christophe Thiery was appointed as chairman and CEO on a provisional basis to ensure business continuity. Lagardère “is contesting these decisions and intends to lodge an appeal against them.”
“This indictment essentially concerns facts relating to personal companies wholly owned by Arnaud Lagardère and not involving any Lagardère group companies,” the company said in a previous statement Tuesday. “As regards Lagardère SA, the indictment relates solely to facts dating from 2018 and 2019.”
The businessman’s attorney, Sebastien Schapira, declined to comment, while Vivendi, which controls Lagardère SA, reiterated on Monday its “support to the Lagardère group.”
The charges come after the prominent heir was questioned on Monday by a Paris judge. French daily Le Monde reported that he’s suspected of using around €80 million in company funds for personal expenses such as home renovations and private jet flights, as well as paying off debt related to inheritance. According to the newspaper, he’s also alleged to have unlawfully secured the support of Qatari shareholders during a 2018 corporate battle with Amber Capital.
Lagardère’s legal woes are a dramatic twist for the businessman often glossing the pages of gossip magazines and cited in France as being at the center of one of the highest profile succession debacles in the nation’s corporate history.
His father, Jean-Luc Lagardère, founded a French industrial and media giant whose influence reached deep into the country’s military and political establishment. After his sudden death in 2003, Arnaud took the helm and presided over the once sprawling conglomerate’s steady demise.
The son jettisoned much of the business to focus on publishing and travel retail and fended off takeover attempts that included a tussle between rival French billionaires Vincent Bollore and Bernard Arnault. The former prevailed through a plan to buy out the stake held by Amber Capital, which had attempted to shake up the Lagardère company.
In 2021, just as Vivendi was sealing the deal with Amber, French financial police raided Lagardère’s Paris headquarters searching for evidence of abuse of power, presentation of inaccurate accounts, misuse of corporate assets and vote buying.
The investigation began on April 30 of that year following a complaint from Amber Capital and an alert from France’s stock market regulator Autorité des Marchés Financiers, the justice ministry source said.
Lagardère retains a stake of around 11% in Lagardère SA, which had revenue of €8.1 billion last fiscal year and paid Arnaud Lagardère €3.5 million. At the end of December, Vivendi had a stake of 59.8%, Qatar Holding LLC 11.5% and Arnault’s Financiere Agache had nearly 8%.
Lagardère SA’s holdings include the Hachette imprint, Le Journal du Dimanche newspaper, Europe 1 radio and the Relay travel retail chain. Luxury giant LVMH, controlled by Arnault, is in talks to buy French glossy magazine Paris Match from Lagardère.
